Thursday, November 15, 2007

EU warns Romania on farm payments

Financial Times

Romania was told yesterday to tighten controls in its farm payment systems or face a severe cut in subsidies next year from the European Union.The European Commission said Deloitte, an independent auditor, had found "major deficiencies in the software module designed to ensure that payments are made correctly" to Romanian farmers and landowners.

The Commission delivered its warning amid persistent complaints from some of the EU's older, western European member-states that Romania was not fully prepared for the challenges of EU membership when it joined the bloc last January.

Opponents of further EU enlargement are using Romania's difficulties as ammunition in their battle to delay or prevent the accession of other relatively backward Balkan countries such as Albania, Macedonia and Montenegro.Romania and Bulgaria became the 26th and 27th members of the EU on January 1. Because it fell short of EU standards in certain areas, Romania was obliged to commit itself to adopting improvements in agricultural spending, food safety, judicial reform and the fight against corruption.

The Commission said yesterday that Romania could lose about €180m in EU subsidies next year if it failed to correct problems in the information technology systems that it uses to distribute payments to farmers.The Commission gave Romania some respite by extending a deadline that it set in October for meeting the necessary standards by one month to December 16.

The financial stakes are high for Romania because, under the EU's budget plans, it is due to receive €443m in direct payments to farmers next year, part of a grand total of €4.3bn between now and the end of 2013.Such sums would have a significant impact in a country where most farmers are not well-off and agriculture accounts for about 40 per cent of employment.

The Romanian authorities have already promised not to make large-scale payments to farmers until they have improved their technology systems.If the Commission decides next month that Romania has not met its requirements, the Bucharest government would have to delve into the national budget to provide the money that would otherwise have come from the EU.

No comments: